The European Investment Bank (EIB) and SNIM (Societe National Industrielle et Miniטre) have signed a EUR 22.5 million financing agreement for the renovation of the Guelbs power station.
SNIM, a limited company established in 1978, is the only iron ore producer in Mauritania and the leading supplier to the major European steel-making groups, competing with Brazil, Sweden and the Canadian mines. SNIM operates open-cast iron ore mines, including the one at Guelb El Rhein, where the power station project aims to replace old generators which have been operating for 20 years with new sets.
The finance contract for renovation of the Guelbs power station was signed in Zourate by Mr Mohamed Saleck Ould Heyine, Managing Director of SNIM, and Mr Philippe Maystadt, EIB President.
The President of the EIB and the Managing Director of SNIM, together with Mr Alexander Burns, Director of Sphere Investment Limited, also signed an agreement in principle relating to an equity participation by the EIB in the company El Aouj S.A., for which the terms of references were signed at Chinguetty on 28 November by Sphere Investment Limited and EIB Director General, Mr Jean-Louis Biancarelli.
Under the terms of this agreement, the EIB announced its intention to acquire a direct EUR 5 million equity participation in the Mauritanian company El Aouj S.A., a subsidiary of the Australian company Sphere Investments Limited. This participation by the EIB will enable Sphere Investments Limited, in partnership with SNIM, to finalise the feasibility study on the exploitation of the Guelb El Aouj iron ore deposit and pelletisation of the ore.
If the results of the feasibility study are positive, as the initial phase appears to indicate, Sphere Investments Limited and SNIM will contribute to developing the exploitation of magnetite quartzites with low iron content in Mauritania’s Tiris region, a strategically important sector for the Mauritanian Government.
The acquisition of a stake in EL Aouj S.A. should contribute to the exploitation of new mining reserves and support SNIM in its diversification efforts. The EIB, the European Union’s long-term financing institution, is supporting Mauritania’s industrial and mining sectors in accordance with the mandate entrusted to it under the Cotonou Agreement, which was concluded between the European Union and the ACP States. The mining sector and SNIM are playing a crucial role in the development of the Mauritanian economy and constitute one of the country’s main sources of foreign currency.